I'm a Fellow at the Adam Smith Institute in London, a writer here and there on this and that and strangely, one of the global experts on the metal scandium, one of the rare earths. An odd thing to be but someone does have to be such and in this flavour of our universe I am. I have written for The Times, Daily Telegraph, Express, Independent, City AM, Wall Street Journal, Philadelphia Inquirer and online for the ASI, IEA, Social Affairs Unit, Spectator, The Guardian, The Register and Techcentralstation. I've also ghosted pieces for several UK politicians in many of the UK papers, including the Daily Sport.

Apple's Foxconn: More Hopeless Nonsense About Wages From SACOM

I’m afraid that I coming to an unfortunate conclusion about some of these people protesting about the wages and working conditions at Foxconn where Apple‘s kit is made. They don’t seem to have much understanding of the world that they inhabit. The people at SACOM (Students and Scholars Against Corporate Misbehavior) have released yet another report insisting that Apple and Foxconn just aren’t doing enough.

Gruelling workloads, humiliating punishments and battery-farm living conditions remain routine for workers assembling Apple’s luxury electronics, according to one of the most detailed reports yet on life inside China’s Foxconn factories.

The researchers claim that intimidation, exhaustion and labour rights violations “remain the norm” for the hundreds of thousands of Chinese iPhone workers, despite Apple redoubling its efforts to improve conditions.

Really? You mean it might take some time to change a corporate structure and culture? That an organisation of over 1 million people cannot be reformed overnight? Not even in only 30 or 45 days?

Wow. Who knew?

Well, I guess anyone who has ever actually tried to change a corporate culture, anyone who has ever read any of the literature on doing so or anyone who has ever observed the real world but other than that….and I’d expect, at least hope, that students and scholars would be capable of one of those three.

Then there’s the danger of the work, the illnesses and accidents in the factories:

There were 728 industrial injuries at Foxconn factories in Shenzhen in the year to May 2012, according the Shenzhen regional public register. This is a small portion of a workforce estimated at 500,000 in the city, but Sacom believes injuries are under-reported: “The management simply negotiate with the injured workers for a settlement. According to the respondents, cases of industrial injuries have an impact on the annual bonus received by middle management. Therefore, the middle management are very reluctant to report all the cases.”

I can see the incentives there and have no doubt that accidents and so on are under-reported. However, we do need to get some sense of proportion here. In the US the actual level of such accidents and illnesses is 3.5 per 100 employees per year.

Nearly 3.1 million nonfatal workplace injuries and illnesses were reported among private industry employers in 2010, resulting in an incidence rate of 3.5 cases per 100 equivalent full-time workers– down from 3.6 cases in 2009, the U.S. Bureau of Labor Statistics reported today.

So among the Foxconn workers in that town, all 500,000 of them, we would expect to see 17,500 such illnesses and injuries. That’s if the plants were as dangerous as the average US workplace. Unless those managers are only reporting under 5% of such cases it looks like Foxconn is safer than the US then.

Ths final major complaint is that the workers in the Chinese factories get less than those working in a similar factory in Brazil:

Sacom, founded five years ago to campaign for better conditions in factories making toys for Disney, is demanding the formation of genuine trade unions within Foxconn; a living wage for Chinese workers, whom it says are paid half the salary of workers in Foxconn’s Brazilian factory, and receive five as opposed to 30 days’ annual leave; and compensation for victims of labour rights abuses.

Well, yes. You know what else is twice as high in Brazil? GDP per capita is twice China’s rate in Brazil. So yes, wages are going to be higher because both numbers are measuring, in their different ways, how rich the people are in a place. GDP per capita is higher in the US than it is in Brazil and wages are higher in the US by about the same multiple too.

So quite what is being complained about I’m really not all that sure.

Yes, I am aware that working conditions there aren’t great and that wages, by your and my standards, are low. But that’s what being a poor person in a poor country means. Working hard at a bad job for little money. All of which is well known and so I really do find it terribly difficult to understand what SACOM are on about. Maybe the bright students are studying and the others are running SACOM?

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THANK YOU for speaking the OBVIOUS. It took the US a LONG time to move from use of slaves to use of immigrants paid slave labor wages to unionization of labor for fair pay. Why do so many people think that other countries, other cultures, other political systems should accomplish the same overnight? Or, why not just skip thru all those steps and get to the one we are at now, doing away with unions and organized labor and employee benefits, etc.???? Maybe the Chinese are just WAY AHEAD of US!

You made some good points in your article, but your final paragraph has a completely ad hominem attack on the intelligence of your opponents that detracts from your argument. It disturbed me, and I would appreciate it if you would remove it.

Great, a man living in comfort insulting individuals attempting to improve the working conditions for human beings. Most likely a share owner afraid of what the negative press will do to the stock price? Never mind the suicides that were taking place, I’m glad this is in the open. Don’t act as if Apple with its influence could not improve working conditions overnight if they wanted to. Its business, I guarantee if Apple products were boycotted and profit margins suffered Foxconn would change its act fast. Don’t be naive old man, your pompous article and mentality is what’s wrong with this world. Things take time like you said and putting the information out constantly is what will lead to change eventually. SACOM care for the weak, you are nothing but a sly tongue with a calloused heart.

You don’t have a clue. In fact no one does, we just look at history and make assumptions for the future, or else people could predicts markets with 100% accuracy. You think if Apple threatened to move its business to a country that treated its workers fairly there would be no effect at Foxconn? You think China with a slowing economy is willing to lose out on income. This constantly happens, blood diamonds was a worse situation yet measures were taken. Apple has a market cap of 528 billion, I’m sure they can negotiate a deal or move elsewhere for the sake of fair labor. Raising their wages would have knock on effects, I don’t see how the same pay and 40 hour work weeks would have any effects. You put all blame on China when there are forces creating this problem. Also consider what would happen if every consumer boycotted Apple products, you think Apple would fall apart genius? No, they’d find a way to satisfy the customer and still be profitable. You are a one track brain, Anything else you wanna say to justify poor treatment of workers? You’d be the guy justifying slavery back in the day because it increased the profit margins for plantation owners and boosted Americas economy.

There is a labor shortage in China, which has led to wage inflation, which has led to overall inflation of about 5% since last year.

Given the reality of labor shortages, there is no barrier for workers who are suffering abuse or low wages to stay.

Just a little context, I have a cousin who is a farmer near Zhengzhou, where Foxconn has a new factory. In recent years, he made from 2000 to 4000RMB a year. The entry-level wage at Foxconn’s Zhengzhou factory is over 2000RMB a month. If 2000+RMB a month is not a living wage in China, what have 800M farmers in China been living on all these years?

Tim Worstall, you are one of my favorite writers. I like that you understand economics and express the effects of economics so well. Please accept my thanks for your past work and my encouragement that you continue in your quest to make the world just a tiny bit more rational.

What a load of rubbish. Bring it all the USA and apart from having to somehow get every other company to move as well because they need all the parts and components suppliers nearby and somehow get all the engineers as well as there aren’t enough in the USA and have to pay them 5 times as much because the costif livingis far higher and before you know it, Apple gear will all cost 4 times as much.

“hater gonna hate”, what is this a Wayne track. People were jumping off the roof of the building, people are missing holidays, being overworked with no compensation. How about people care for humanity, this isn’t a joke. People with all their vast knowledge of why things can’t happen should be trying to figure how things can happen. Fair labor should be a worldwide mission along with stopping genocide, slavery, etc. Wake up and stop taking a dump on people who make an effort

“But that’s what being a poor person in a poor country means. Working hard at a bad job for little money.” Sir, repent! Just because something is normal does not make it okay, sane, or forgivable! I beg of you, repent of your violent, vicious ways!